THINK EVS ALWAYS COST MORE TO INSURE? NEW DATA SHOWS SOME GAS SUVS COST $1,000 OR MORE PER YEAR THAN COMPARABLE EV VEHICLES

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Electric vehicles (EVs) are packed with sensors, advanced driver-assist systems and those super-advanced (and expensive!) high-voltage battery packs. So paying more for insurance wouldn’t surprise any driver. Turns out EVs aren’t the most expensive vehicle in Canada to insure, at least, not always.

A recent report released by Toronto-based insure-tech firm, My Choice, examined more than 60,000 Ontario auto insurance quotes and found that some luxury gas-powered vehicles can cost over $1,000 more per year to insure than a comparable luxury EV (1).

The release of this study is challenging the assumption that ‘electric equals expensive insurance’ — and shedding light on where drivers end up paying more, whether it’s an EV or a standard combustible engine.

In general, the My Choice study revealed that EVs often carry higher premiums in entry-level categories, while the premium gap (between an EV and a comparable gas-powered model) narrows in certain categories, such as SUVs.

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However, there is one vehicle category where the cost to insure an EV is actually cheaper than the cost to insure a comparable gas-powered vehicle — the luxury car market. Why? Because insurers don’t price policies based on fuel type alone. They look at:

• Replacement value
• Repair complexity
• Battery and parts costs
• Theft rates
• Claim severity and total loss risk

In other words, it’s not the plug that drives the premium — it’s the overall risk profile of the vehicle.

To help drivers understand what costs will come with owning a vehicle, here are the general findings of the My Choice report.

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In entry-level vehicles, EVs usually cost more to insure

In the compact and entry-level segment — where many first-time EV buyers shop — electric vehicles consistently come with higher insurance premiums than comparable gas models.

For instance, a Tesla Model 3 EV costs about $1,776 per year to insure, roughly $223 more than a Honda Civic, while a Nissan LEAF EV costs $1,893 per year to insure, approximately $340 more than the Civic, according to the My Choice data (2).

Even when compared with higher-trim gas cars like the Toyota Corolla or Mazda3, EV insurance premiums remained noticeably higher.

For budget-conscious Canadians, this means fuel savings and federal EV rebates may be partially offset by higher insurance costs — especially in the first few years of ownership.

Using online platforms, such as CarGurus, makes the process of buying a used car simple. CarGurus compares thousands of listings from licensed Canadian dealers so you can quickly see which cars are fairly priced and which may be overvalued. You can filter by make, model, year, mileage, budget, and even features like fuel efficiency or safety ratings. The CarGurus “Instant Market Value” tool gives you a clear snapshot of what a car should cost in your area, helping you negotiate with confidence.

Compact SUVs show a narrower gap — and occasional reversals

For drivers looking at models in the compact SUV category, the My Choice study shows that insurance costs in this category can be mixed.

For instance, a Tesla Model Y EV costs about:

• $322 more per year to insure compared to the Subaru Forester
• $209 more per year to insure compared to a Volkswagen Tiguan
• but $97 cheaper to insure per year compared to a Toyota RAV4 (4)

In other words, insurance on EVs still trends higher overall, but the premium gap narrows — and sometimes disappears — depending on the specific vehicle and its risk profile.

In luxury vehicles, gas models often cost far more to insure

At the luxury end of the market, the insurance story flips entirely. According to the data, premium or luxury gas-powered vehicles consistently cost more to insure. For example, a Tesla Model X EV costs about $2,263 per year to insure, compared to a BMW X5 that costs $3,626 per year and a Mercedes-Benz GLE that costs roughly $3,313 per year.

Even within the same brand, fuel type wasn’t the deciding factor. For example, the gas-powered Audi Q7 costs about $75 more to insure annually than the Audi Q8 e-Tron EV (5).

In general, the data shows that drivers of premium gas-powered vehicles will pay at least $1,000 more per year in insurance, alone (a cost that can quickly climb, depending on the vehicle).

What can Canadians do with this information?

If you’re considering the purchase of a vehicle, the data provided by this report should remind you that the sticker-price is only one factor in determining a vehicle’s suitability and affordability.

Now, if you’re weighing gas versus electric, here are six strategies to protect your budget before you commit:

1. Get insurance quotes before you buy

Insurance should be part of your shopping process — not something you arrange after purchase. Get quotes on the exact trim level and model you’re considering. Differences can run into the hundreds — or even thousands — of dollars per year.

2. Compare total cost of ownership — not just sticker price

When comparing vehicles, factor in all costs, not just the purchase price. Cost to consider include:

• Insurance premiums
• Fuel or charging costs
• Maintenance and repair expenses
• Federal or provincial EV incentives
• Depreciation

An EV may cost more to insure, but lower fuel and maintenance costs could still make it cheaper over time.

Platforms like CarGurus make car shopping simple. Compare thousands of listings from licensed Canadian dealers, and use their “Instant Market Value” tool to give you a clear snapshot of what a car should cost in your area, so you can avoid paying more than you need to.

3. Be strategic when shopping for a vehicle

If comparing the cost of insurance you’ll want to consider what factors impact the premium. In most jurisdictions across North America, insurance premiums factor in: theft rates, average repair costs, replacement value and safety ratings.

Some high-demand vehicles — gas or electric — carry higher premiums because they’re stolen more often or cost more to repair. If insurance cost is a concern, ask your broker which models in your price range tend to be cheaper to insure.

4. Consider raising your deductible

If you have a clean driving record and emergency savings, increasing your deductible can lower your annual premium. Just make sure you could comfortably cover that amount if you needed to make a claim.

5. Bundle and ask about discounts

Where available, you can find savings if you bundle home and auto insurance coverage with one provider. Also, consider installing anti-theft devices and maintaining a clean driving record, as this can all help reduce premiums.

6. Re-shop your insurance regularly

As EV adoption increases and repair networks improve, pricing can shift. Shopping your policy every one to two years ensures you’re not overpaying.

Bottom line

In general, there is no clear winner between EVs and gas-powered vehicles when it comes to cost and longevity. To get a complete picture, it’s best to first understand the full financial cost of each vehicle you are considering, before finalizing the sale. For many Canadians, that extra step could mean saving hundreds — or more than $1,000 — per year.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

My Choice (1, 2, 3, 4, 5)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

2026-04-08T11:23:20Z